SoftBank posts loss of $2.4 bn in Q3 on fall in 'Vision Fund' valuations

In particular, SoftBank was hit by unrealised valuation losses for South Korean e-commerce platform Coupang, Chinese ride-hailing firm Didi Global and AutoStore Holdings

Japan's SoftBank Group booked a surprise $2.4 billion quarterly loss on Wednesday, hit by a decline in the value of e-commerce platform Coupang and other tech companies held by its Vision Fund investment arm.

 

The result is likely to raise more questions about how founder Masayoshi Son aims to fund one of the tech investment giant's most ambitious undertakings yet, a mammoth bet on AI that includes hefty backing for Sam Altman's OpenAI. 

While Son's deep-pocketed pledges on AI mark a return to the aggressive SoftBank of old, so did Wednesday's loss. SoftBank rocked the technology investment world by taking big stakes in startups through its Vision Funds. While some of those have paid off, others, like WeWork, have flamed out. 

SoftBank reported a net loss of 369.2 billion yen ($2.4 billion) in the October-December quarter, hit by unrealised valuation losses at South Korea's Coupang, Chinese ride-hailing firm Didi Global and AutoStore Holdings. 

The third-quarter result compares to an LSEG consensus estimate of a net profit of 234 billion yen ($1.5 billion) drawn from four analysts and a profit of 950 billion yen in the same period a year earlier. 

Cash and cash equivalents dropped to 4.7 trillion yen ($30.6 billion) as of end-December from 6.2 trillion yen in March which was the end of the previous financial year. 

Sources said in January that SoftBank was in talks to invest up to $25 billion in ChatGPT creator OpenAI. Recent media reports have said that figure has grown to $40 billion, though some of that amount would later be syndicated out to other investors. 

SoftBank has also committed to investing $15 billion in Stargate - a venture with OpenAI and Oracle that will build AI data centre capacity in the United States and which has been backed by US President Donald Trump. 

The Vision Fund unit posted an investment loss of 352.7 billion yen, breaking a run of two consecutive quarters in the black. 

Vision Fund 1 has had a gross gain of $21.6 billion since its inception in 2017 while Vision Fund 2, which covers a broad suite of earlier-stage startups, has logged a $22.2 billion loss since 2019. 

Total returns for SoftBank, comprising share gains and dividends, are up more than 11 per cent over the 12 months, outperforming a 4 per cent return for the benchmark Nikkei 225.

 

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